The capital city recorded the highest-ever office transaction (3.34 mnsqft) in a six-month period during (July December 2017). However, affordability, that is house price to income ratio has grown better in Chennai as the affordability is nearing 4.5 from 5.5, which is a good sign for the industry, Kanchana Krishnan, Chennai Director, Knight Frank, said.
Zaidi said the average BSP (basic selling price) has come down by 2 percent during 2017.
With trickling sales and sharp drop in launches, he said the unsold inventories in NCR have come down, still it would take more than four years to clear the unsold stocks. However, even after the implementation of RERA, there has been no meaningful positive impact on sales on account of renewed confidence in the case of Pune in H2 2017. Approximately 37,653 units were sold in NCR a year ago, a drop of 6% from 2016. "This includes bouquet of incentives such as waivers on stamp duty, floor rise and assured rental schemes", he added.
In terms of sales the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period previous year, however overall sales volumes reflect a declining pattern.More news: New State Dept travel guidance ranks countries by threat level
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"At the end of 2017, India's residential sector appears to have shrunk to a fraction of its size in less than a decade". Customers who drove a hard bargain got reductions of up to 10% in apartment prices, in the form of cash discounts or freebies, says Knight Frank's latest report on the sector. In Mumbai, unsold inventory declined 25 per cent to 1,15,964 units.
"The pace at which developers align themselves to the new regulatory norms and launch new products in the right ticket sizes that appeal to the homebuyer's interests will determine the trajectory of the market going forward", said the report. The Chennai residential market, as of now, holds inventory to sell over the next 18 months.
The stagnation in the market, according to the report, is owing to ambiguity over Real Estate (Regulation and Development) Act and concerns of job security in IT sector.
New launches across the eight key metros of Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad, declined 41 per cent in the second half of 2017 to 40,832 units from 68,702 units in the same period in 2016. It is also for the first time that prices have dropped by 7 per cent with an effective price difference added with discounts which add another 12 to 13 per cent. New supply plummeted to 6,176 units in the second half of 2017, a 32% y-o-y decline over the same period in 2016 and a 47% drop from its peak in 2014.